Regional WCM Vendors
Buy Local...Australians Do
by James Robertson
02-Oct-2004
Based on press coverage, you could be forgiven for thinking there are only a handful of international Web CMS vendors that dominate the marketplace. In fact, the opposite is true, with many areas of the globe served by a strong set of local CMS vendors, with few if any dominant players. Regions such as Australia, Europe and even the USA all have a well-established local marketplace, with a range of products that are little heard-of outside national or regional boundaries.
This article looks in particular at the Australian marketplace, which is where my consultancy operates. I think the conclusions reached apply to many other parts of the globe as well.
Shape of the Australian CMS market
The Australian market has bloomed with the coming of "second generation" content management systems. These learned from the initial generation of Web CMS products, which were renowned for being as complex as they were powerful. While these early market leaders (now considered to be the ‘Tier 1’ solutions) primarily emerged from the USA, smaller vendors rapidly sprung up across the globe in direct competition.
In the last few years, a number of regions have established a strong local CMS market, including Europe and Australia. For example, at the time of writing, there are 76 local CMS vendors in the Australian market. In comparison, of the estimated 1,000 products marketed globally, only 20 are generally available locally in Australia , via either local offices or resellers. (See a full list of products available in the Australian market.)
Marketplace trends suggest that this proportion of local versus international products is unlikely to change. Instead, there is every indication that local products are growing well and steadily gaining market share, at the expense of the (often more expensive) globally-available options.
There are many reasons for this success, including very attractive pricing, competitive features and the benefits of local support. I'll take a look at each of these factors below.
Cost competitive
The historical weakness of the Australian dollar has been a boon for the local CMS industry, as international vendors have struggled to remain cost competitive. With the top-tier international products typically starting at AU$100,000 (US$70,000) for a base solution -- and heading rapidly upwards from there -- they fall outside the budget for many organizations looking to obtain a CMS.
In comparison, the mid-tier of the Australian-produced products ranges from AU$20,000 to AU$80,000, with the highly-competitive market conditions placing constant pressure on prices. For simple websites, there are an increasing number of CMS products even being offered in the sub-AU$20,000 price category.
This is not unlike market forces on other continents, too. Of course, falling prices may ultimately have a negative impact on mid-tier players as well, as lower-cost providers enjoy more success at the former's expense.
Remember that these prices are for the software purchase only. As a rule of thumb, the total project budget, including deployment, customization and support, is likely to be 2 to 3 times the product purchase price.
As good, or better
Australian products aren’t just cheaper, in many cases they are as good as anything available world-wide. Having learned from the experiences of the “early adopters," local vendors have produced products which are developed from the ground up to be both powerful and easy to use.
Most of the local products provide elegant and flexible mechanisms for managing sites, and some lead the way in innovating content management, including interesting approaches to blurring the line between web content and other business information. Better yet, nearly all of these systems tend to be much more “out of the box” than the earlier generation of products, so organizations with standard requirements can genuinely expect to have solutions deployed and running in a matter of days or weeks. Gone is the necessity for extensive “integration” before the first page can be published.
Australia is even a major player in the open-source community, with three commercial integrators offering open-source CMS solutions (Mambo originally from Miro, MySource Matrix from Squiz.net and Farcry from Daemon). As can be expected, these are starting to do very well with smaller organizations and in the public sector.
Local presence and support
This is perhaps the strongest argument for purchasing a locally-produced product. When you need help (and you will, at some point), the vendor is just down the road and there is a good chance of talking with the actual developer who created the code.
In sharp contrast, the international offerings have to rely on local offices, which often consist entirely of sales staff. These vendors often rely on local implementation partners to do the initial leg-work and some degree of customer support, but most technical support comes thereafter from head offices in the USA or Europe.
In my experience, the smaller size of local vendors has also made them more responsive to customer needs. Often having been forced to support the customer through all aspects of the project (including non-technical aspects such as training, migration and site design), they have a much better understanding of the real-life issues that organizations wrestle with when implementing a CMS.
Product diversity
There is no single “best” content management system. Witness the huge diversity of products available in the Australian market, which is roughly representative the global marketplace as a whole. At a quick glance, all these products provide the same basic functions: WYSIWYG authoring, template-based publishing, workflow and security. Yet it is how they deliver these capabilities that varies so greatly.
I estimate that the products in the marketplace are perhaps 30% similar in capabilities, with the other 70% being vastly different. These differences have been driven by the specific vision or direction of the vendors, as well as the nature of their earliest implementations and largest customers, which leads to each product being strong in one area but weaker in others.
As a result, each product has a unique mix of capabilities, strengths and weaknesses. This can be advantage, however, since each prospective buyer brings a unique set of business requirements for content management. With the large number of offerings in the market, this means that somewhere there is a product which is a very close fit to the specific needs of the organization. It also means that one CMS package may be very "out of the box" for one firm, but not for another, and vice-versa.
The challenge is therefore to identify content management requirements and to evaluate how well products meet these needs (instead of attempting to compare one CMS directly against another). While this can be difficult in the ever-changing market, the reward is to minimize the amount of customization and maximize the business benefits.
International acquisitions and exports
There is clear evidence that Australian products are competitive in the world market: they are increasingly being acquired by the big international players. The first was Aptrix, for a long time a market leader among Lotus Notes-based content management systems. This product has now been purchased by IBM itself, and merged into their Notes offerings.
In the last few months, TOWER Technology Pty Ltd (a document and records management firm) was acquired by Vignette, one of the “big five” content management systems. It is a safe bet that this won’t be the last purchase of an Australian vendor we’ll see happen over the coming year or two, and it suggests that the topmost successful regional players can be elevated to the next tier (at this writing, Canadian vendor Open Text is digesting its acquisition of German/Swiss vendor IXOS/Obtree).
In the meantime, Australian vendors are busy taking their wares out onto the world stage. Some Australian vendors now boast offices in London, continental Europe, or the USA. Still more have entered into arrangements with overseas resellers.
This leap into the huge worldwide market is a risky one: after all, Australian vendors may suffer from the same deficiencies of local support that plague the Tier 1 global players. Nevertheless, at least a few of the vendors are likely to profit greatly from these ventures. Some regional European and North American players are likewise putting their toes into international waters.
Into the future
The CMS marketplace remains very much in flux around the world, and Australia is no different. Vendors are continuing to innovate their products in order to distinguish themselves from the pack, and all are looking to capture marketshare. Nevertheless, in the short to medium-term, I believe regional CMS vendors will be greatly assisted by the huge growth in the market as a whole: in my company's experience, only about 20% of organizations currently have a content management system.
For the time being, most vendors will therefore continue to make sales and grow. It is also not too hard to foresee, however, that product capabilities will start to stabilize and standardize. With the market being increasingly “commoditized”, there will start to be a consolidation of vendors and offerings. Of course, this has been expected to occur for some time now, and yet still more regional offerings join the scene each month, so no one can say exactly when any forthcoming consolidation will really happen.
In the meantime, I believe local vendors will go from strength to strength. So if you are located in Australia and seeking a content management solution, closely consider the many excellent products produced by local vendors. And if you're located elsewhere, you should also consider buying locally -- you might get a better product, with stronger support, for a lower price.